DICT to slap fees vs telcos inefficiently using frequencies

MANILA -- The Department of Information and Communications Technology (DICT) is eyeing to impose punitive fees against telcos that are not efficiently using the frequency spectrums awarded to them.

DICT Secretary Eliseo Rio Jr. said a spectrum users fee (SUF) will be charged to inefficient telco firms to make them pay more for the use of frequencies.

“Using the SUF, we plan to punish telcos who are not efficiently using the spectrum awarded to them, by making them pay more than those who are more efficient. This will force the inefficient ones to return frequencies, as it would no longer be economical to retain them,” Rio said in a statement posted on his Facebook page Sunday.

The secretary also reiterated his opposition to the proposed auction of frequency spectrums that will be used as basis for the selection of the new telco player, which is being favored by the Department of Finance.

“There are those who contend that the frequencies are owned by the Filipino people, but these frequencies are totally useless without telcos who have to invest tens of billions of pesos for their infrastructure. Yes, some telcos who sold their frequencies to the duopoly earned billions of pesos. But why punish a new player who has not earned any single centavo yet, for the sins of these incumbent telcos?,” Rio said.

“By proposing an auction for the new player to recover what is due the Filipino people from failures of past administrations is not only illogical but really unfair. The government can still run after the beneficiary of the sale of frequencies if proper taxes were not paid, and it is not the task of DICT to get it from a new player whom we are trying so hard to attract to give better and less expensive ICT services,” he said.

The DICT has opposed the auction mode as it will force a new player to put up a huge amount to qualify for the bidding process, which is not related to setting up telecommunication facilities and improve services.

Telco industry stakeholders have expressed their preference to the draft terms of reference (TOR) of the DICT, which uses the highest committed level of service (HCLoS) as criterion for the selection of a new major telco player, over the use of auction as a mode for the selection during a public consultation conducted by the department last Friday.

Under the HCLos formula, which is being favored by the DICT, the new telco will be selected on the following criteria: 40 percent for national population coverage, 20 percent for minimum average broadband speed and 40 percent for annual capital and operating expenditure over a five-year commitment period.